Uniting Diverse Stakeholders Around Resiliency: Q&A with Panasonic

Peña Station Next, a transit-oriented mixed-use development, stretches across 382 acres near Denver International Airport. The futuristic community created in partnership with Panasonic Enterprise Solutions showcases smart, sustainable, and connected technologies. In September 2016, Panasonic Corporation of North American consolidated its operations hub for Panasonic Enterprises in Denver and become the anchor tenant.

The development now has its own renewable energy microgrid that includes rooftop solar on Panasonic’s facility, a solar photovoltaic installation over the airport parking lot, and a lithium-ion battery system. Stakeholders Panasonic, Xcel Energy, Denver International Airport, energy storage company Younicos, and developer LC Fulenwider came together to create the microgrid. The project recently won an Environmental Leader Award, with one of the judges calling it a groundbreaking effort.

Recently we caught up with Matthew Crosby, utility solutions program manager for Panasonic’s North American smart city business CityNow, to find out how diverse stakeholders joined forces around increasing energy resiliency and reliability for Peña Station Next.

How do you define a microgrid and what can they do?

There are various definitions within the industry, but we typically define it as the ability for a customer or group of customers within a utility service territory to have an island of electric grid service. That sort of backup or island capability is useful for businesses that have significantly high service level requirements.

Typically microgrids are owned and operated by a single entity — a military-style campus, a university, or even a hospital. These facilities are paying for resiliency; let’s call it insurance against grid outages. A microgrid can include any number of distributed energy resources that provide extra reliability.

How is the microgrid at Peña Station Next different from a typical one?

We’re not just focused on energy infrastructure but on smart city development. The entire development is intended to be a sandbox to test, measure, and quantify the benefits of a smart city for the Denver metro area.

We saw the opportunity to work with Xcel Energy because they were interested in understanding the business case for backup power and battery energy storage systems within a microgrid for a large commercial customer. We brought the utility, the city and county, and ourselves, as a private customer, to the table. We think this kind of model is replicable and can achieve greater impact than a single-owner microgrid.

The microgrid includes a 1.6-megawatt PV system owned by Xcel Energy that sits above a parking lot serving Denver International Airport. It’s also part of the transit-oriented development so residents can use the parking facility covered by the PV array and commute downtown via the light rail. Had that land, carport structure, and PV array system been owned by a single entity, it would have been challenging to make a positive business case within, let’s say, a 10-year payback period. By separating out the costs among the different beneficiaries of that system, we were able to make the system pay back. We specifically created a public-private model just for the PV.

What have been some of the results so far?

We’re generating on the order of 5 megawatt-hours of PV from the 1.6 megawatt system per day, assuming it’s a sunny day. But that amount of energy far exceeds what we’re using. We think the PV currently there can offset the consumption of an additional seven Panasonic-sized commercial customers in the development.

We’re already well on our way to achieving a carbon-neutral development, defined as offsetting all of the carbon content from electricity that we’ll bring into the district. The way we’ll achieve that is by minimizing grid purchases and maximizing cost-effective onsite generation. Anything we do buy from the grid, we want to measure what the system dispatches and how much energy is coming from natural gas versus wind versus coal.

What could this kind of approach mean for utilities’ corporate customers?

Electric utilities have a major role to play in developing the distributed infrastructure that can provide extra resiliency and reliability that certain businesses depend on. Thinking about [facilities like] our network operations center, which must be online 24-7 and has significant uptime requirements, adding battery storage and distributed systems can attract new businesses to certain areas.

District energy systems such as those powered by combined heat and power (CHP) have primarily been used in places like New York City, the northeast, and Europe. These systems can anchor a smart city development. By connecting to a district system, you can lower the cost of what you were otherwise going pay the utility for standard services. Also, if you’re connected to a district heating and cooling system, that allows you to minimize the amount of HVAC equipment that you’d have to invest in, for example. You can allocate that space to other more profitable uses.

What have been the biggest challenges so far?

In setting up the microgrid, the biggest hurdle was contracting. We had 15 subcontracts because we had separated out and shared the cost components among these entities, and they each see different types of benefits. It’s worthwhile to make those contractual efforts, but we’ve got to streamline that.

Panasonic is interested in having this be a showcase for how you can maximize energy savings and property value through a comprehensive multi-stakeholder smart city approach. We did this in Japan in Fujisawa, a smart and sustainable town outside of Tokyo. We brought in similar entities for a 1,000-home development on the site of an old Panasonic manufacturing facility. The metrics there are emissions reductions on the order of 70%, increased solar generation by 30%, lowered water consumption by 30%. But where it was most interesting was the increase in the property value. The homes within the development have 25% more market value than similarly sized homes built the same year across the street. That’s the data point we’re seeking to replicate in the US.

Are you noticing an increased demand for energy resiliency and reliability?

We’re still learning about the customers that will want to locate in Peña Station Next. We know that businesses are motivated by things like the resale value of the property. We’re seeing data that highly efficient developments usually yield a much higher return on an initial investment.

In particular, we work with horizontal developers. When we put together the carbon neutral energy master plan, it was critical that LC Fulenwider, the master land developer for Pena Station Next, had a seat at the table. They have the market perspective: What will the market be able to support in terms of land value over time? What can we expect around property owners’ and tenants’ willingness to pay for certain amenities? It’s pretty universal that businesses want to have more efficient, comfortable, and valuable buildings. And there are businesses that we know value added resiliency, such as data centers.

Was there a key lesson that you and your colleagues learned?

Partnerships really do matter. You have to be able to have a working relationship with an entity that’s willing to experiment with you and do things differently. We definitely had that. You have to take risks. Some things work well and some don’t. You have to be willing to have those honest conversations.

Panasonic’s Peña Station Next solar and storage microgrid won a 2017 Environmental Leader Award. Learn more about the project here.